The Employee Retention Tax Credit (ERC or ERTC) was enacted in March 2020, but had limited appeal because businesses were ineligible to claim it if they obtained a PPP loan. That changed in December 2020 when the ERC eligibility ban was lifted, and legislative changes in March 2021 have also expanded the eligibility and benefits to businesses. Since then, ERC claims have exploded, with some estimates showing that nearly nine million businesses that received PPP funding could be eligible to claim the ERC.
Withum has been working with companies around the country to calculate and claim the ERC. Businesses who qualify could be eligible for cash refunds up to $5,000 per employee for 2020 and up to $7,000 per employee for each quarter which the business qualifies in 2021 (through Q3 2021 for most businesses). Eligibility rules, in particular with corporate groups or closely held businesses can be complex, as can the calculations of the maximum refunds amount with the interactions of other governmental programs such as the Paycheck Protection Program and FFCRA Sick Pay credits.
For additional information on eligibility, see the below flow charts, which serve as a great starting point for both the 2020 and 2021 ERC programs.
Is the IRS Auditing Your Employee Retention Credit Claim?
If you took advantage of the Employee Retention Credit (ERC) and are now being audited by the IRS, it is crucial to partner with a qualified professional to represent you before the IRS.
IRS audits of the ERC (sometimes called ERTC) are :
- Different from regular income tax audits.
- Require deep knowledge of the ERC governing rules.
- Can last upwards of six months.
Submitting complete and accurate responses to the very first request from the IRS is crucial in resolving your audit quickly and efficiently. Work with a team who understands the ins-and-outs of the ERC and has significant experience representing taxpayers in ERC audits. We can represent you before the IRS even if we did not prepare your ERC calculation.
Why Choose Withum for Your ERC Audit Process
At Withum, we understand the complexities of the ERC and have a dedicated team of experts assisting clients with IRS audits of the ERC. We have prepared over 1,000 ERC calculations and have represented more than 20 taxpayers in ERC audits. Let us help present your best case to the IRS. You only get one chance to make a good first impression, and you don’t want to give that up when it comes to the IRS. Withum is here to help. Schedule a complimentary call with our team of ERC experts for more information.
ERC Calculations Prepared
Taxpayers Represented in ERC Audits
in Client ERC Credits
From my first call with Withum, I knew I was in good hands. They explained the rules and procedures to me in detail and we came up with a plan to respond to the IRS. When it came time for me to testify, they prepared me for the most important questions and helped me focus on presenting the right message. I would highly recommend them to anyone facing an IRS audit.
ERC Audit Client
Contact our dedicated team of experts to assist and address any ERC challenges.
The IRS announced a processing moratorium on employee retention credit (ERC) claims on September 14, 2023. As part of that press release, the IRS announced that it was planning to […]
The IRS announced on September 14, 2023 a processing moratorium on new employee retention credit (ERC) claims. This means that it will not process any newly filed ERC claims until it […]
On July 25, 2023, the Office of Fraud Enforcement and National Fraud Counsel of the IRS hosted a webinar on the Employee Retention Credit (ERC) and discussed the current landscape […]